December 2024 marked a historic milestone for the Indian IPO market, with 15 companies collectively raising Rs 25,425 crore. This achievement makes December 2024 the best month for initial public offerings since 1996, both in terms of the number of IPOs and the amount of funds raised. Back in December 1996, 33 companies had raised only Rs 931 crore, highlighting the remarkable growth of the market.
Prominent IPOs last month included Vishal Megamart, which raised Rs 8,000 crore, International Gemological Institute (Rs 4,225 crore), Mobikwik Systems (Rs 572 crore), and DAM Capital Advisors (Rs 840 crore).
Traditionally, December is considered a slow month for IPO activity due to reduced foreign portfolio investor (FPI) participation during the holiday season. However, December 2024 defied this trend, continuing the momentum seen in recent years. Since 2021, the number of December IPOs has consistently increased, with double-digit launches every year except in 2022.
What Drove the Record-Breaking December IPOs?
Investment bankers said the strong IPO activity was contributed by increasing participation from domestic investors and encouraging pricing strategies. For the Indian equity market now, domestic institutional investors became a driving force and hence a major contributor to IPO fundraising.
For instance, domestic institutions were net buyers in the primary markets to the tune of Rs 5.3 trillion in 2024, while foreign investors chipped in with Rs 1.2 trillion despite being net sellers worth Rs 1.25 trillion in the secondary markets.
“Earlier, IPOs were heavily dependent on FPIs, who were inactive during December. Now, domestic institutions are leading from the front, ensuring full participation even during the holiday season. The momentum in the market had been strong and the investors were confident of fetching attractive returns post listing,” said Pranjal Srivastava, Partner Investment Banking at Centrum Capital.
Analysts further explained that reasonable IPO valuation at the time of issue attracted a broad spectrum of investors, while at the same time valuations had been a cause of concern in secondary markets.
Indeed, all of calendar 2024 was a record year for India’s primary markets in terms of mainboard and SME IPOs. As many as 91 companies mobilised Rs 1.6 trillion through mainboard IPOs, higher than the previous record of Rs 1.2 trillion in 2021. On the SME platform, 240 firms raised Rs 8,757 crore beating the record realised by Rs 4,686 crore that mobilized 182 companies in 2023. Some of the highlights of 2024 included the Rs 27,870 crore IPO by Hyundai Motor India, the largest ever in Indian history.
Success in December and throughout 2024 underpins the developing maturity and depth of India’s equity markets, underpinned both by domestic and international investors.
Do you have a news tip for Lakshmishree reporters? Please email us at media@lakshmishree.com
Source: BS
News Desk
